Tax and Financial Strategies 2014/15

Despite ongoing attempts to simplify the tax system, UK taxation remains full of complexities. It's no wonder, then, that it takes careful planning and expert advice to help you to make the most of your money and to achieve your lifetime financial goals.

Lowering and deferring tax is, of course, a key aim but with some thought you can also free up cash for your business or to use for your personal plans, as well as providing you and your family with long-term financial security.

Although your exact requirements will require discussion in relation to your individual circumstances, in this guide we have explained some of the key areas to consider when you turn your thoughts to maximising business, personal and family wealth. Please contact us for one-to-one advice that is tailored to your needs.

How to benefit from our services:

Please read those chapters which are relevant to you as soon as possible.

Take note of the key points arising from this guide, and any action you may wish to consider

The general effect of the Civil Partnership Act is to treat registered civil partners on a consistent basis with married couples. For the purposes of this guide we have on occasions referred only to spouses.

'HMRC' refers to HM Revenue & Customs.

This guide is based on current understanding of legislation and the Government's proposals at the time of publication and under no circumstances should action be taken without first seeking appropriate professional advice.

Economic outlook

After a sustained period of economic gloom, an air of comparative optimism now surrounds the UK economy. Consumer and investor confidence is the highest it has been for years, giving many people more breathing space to consider the future.

However, the ongoing message from Chancellor George Osborne has been that 'the job is not yet done'. With things looking up it is more important than ever to have a solid financial planning strategy for your business and personal affairs. Steps can be taken now to capitalise on an improved economy and help mitigate the impact of any future disasters.

Boosting business finances

Running a successful business requires a robust strategy for all financial possibilities, in times of prosperity and austerity.

Your tax-efficient plan is best focused on these areas:

choosing the most appropriate business structure

capitalising on allowances and reliefs

claiming tax deductible expenses

deciding on your year end

reducing your liability to capital gains tax (cgt)

considering the role of family members

strategies for exiting your business when the time comes.

Securing personal wealth

Employing effective planning strategies can also help you to safeguard and maximise your personal finances. We can make your capital as tax-efficient as possible, taking advantage of allowances and reliefs of which many people are unaware, and ensuring you pay no more tax than you need.

Any effective personal strategy should include:

a tax-efficient remuneration package

extracting profit from your business

retirement planning

estate and inheritance tax (IHT) planning

tax-efficient gifting strategies.

Changes for businesses

The challenging economic climate has abated slightly, and the message in recent months has been one of increased optimism. With the future still uncertain, the Government has put forward a number of measures with the aim of supporting businesses. Some of the key changes are:

New Employment Allowance

Last year Chancellor George Osborne announced plans to introduce a new Employment Allowance designed to reduce the national insurance liability for businesses and charities, and to encourage businesses to expand and take on new staff.

With effect from April 2014 most businesses, charities and Community Amateur Sports Clubs in the UK are now entitled to claim up to £2,000 off their employer national insurance contributions (NICs) bill.

Annual Investment Allowance (AIA)

The maximum amount of the AIA has been increased from £250,000 to £500,000 for all qualifying expenditure on plant and machinery made from 1 April 2014 for corporation tax and 6 April 2014 for income tax. After 31 December 2015 the limit will be reduced to £25,000. Transitional rules will apply.

Enhanced capital allowance (ECA)

The period in which businesses investing in new plant and machinery in ECA sites in Enterprise Zones can qualify for 100% capital allowances has been extended by three years to 31 March 2020.

Real Time Information

Meanwhile, micro businesses have been granted additional time to comply with HMRC's new Real Time Information (RTI) reporting requirements.

Under RTI, employers must submit their PAYE information to HMRC on or before the day of payment. HMRC previously granted temporary relaxation of the RTI regulations for employers with fewer than 50 employees who pay their staff weekly or more regularly and found it difficult to report at the time of payment.

These employers had been allowed to send information by the date of their regular payroll, but no later than the end of the tax month. While this relaxation of the rules came to an end as planned in April 2014, HMRC announced that eligible micro businesses (1-9 employees) will now be given until April 2016 to prepare for RTI. Until this time they may submit PAYE data on or before the last payday in the tax month. The concession will not apply to businesses that start up during this period.

We can help with all of your tax and financial planning needs. For a strategic review of your finances, please contact us.